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In the recent times, significant relaxations has been made in the tax slabs by the government under the new regime. The following article dives deep into the tax slabs and related concepts.
Income Tax Slab Rates - An Overview
- New Regime Tax Rates for FY 2025-26:
- Up to Rs.4 lakh - NIL
- Rs. 4 lakh - Rs.8 lakh - 5%
- Rs.8 lakh - Rs.12 lakh - 10%
- Rs.12 lakh - Rs.16 lakh - 15%
- Rs.16 lakh - Rs.20 lakh - 20%
- Rs.20 lakh - Rs.24 lakh - 25%
- Above Rs.24 lakh - 30%.
- New Regime Tax Rates for FY 2024-25:
- Up to Rs.3 lakh - NIL
- Rs.3 lakh - Rs.7 lakh - 5%
- Rs.7 lakh - Rs.10 lakh - 10%
- Rs.10 lakh - Rs.12 lakh - 15%
- Rs.12 lakh - Rs.15 lakh - 20%
- Above Rs.15 lakh - 30%
- Old Regime Tax Rates for FY 2025-26 and FY 2024-25:
- Up to Rs.2.5 lakh - NIL
- Rs.2.5 lakh - Rs.5 lakh - 5%
- Rs.5 lakh - Rs.10 lakh - 20%
- Above Rs. 10 lakh - 30%
The revised tax slabs as announced in Budget 2025 for new regime are as follows:
Income Tax Slabs | Income Tax Rates |
Up to Rs. 4 lakh | NIL |
Rs. 4 lakh - Rs.8 lakh | 5% |
Rs. 8 lakh - Rs.12 lakh | 10% |
Rs.12 lakh - Rs.16 lakh | 15% |
Rs.16 lakh - Rs. 20 lakh | 20% |
Rs. 20 lakh - Rs. 24 lakh | 25% |
Above Rs. 24 lakh | 30% |
Income Tax Slabs FY 2025-26 and FY 2024-25 PDF Download
The Rebate has been increased to Rs. 60,000 from Rs. 25,000 for the FY 2025-26. With the revised tax structure, individuals earning up to Rs.12 lakhs will have no tax liability due to the increased rebate of Rs.60,000. For salaried individuals, the tax liability will be zero for incomes up to Rs.12.75 lakhs due to the Rs.75,000 standard deduction.
Note:
If you're filing your income tax return for FY 2024-25, these are the tax slabs that apply to the income earned between 1st April 2024 and 31st March 2025. The due date for filing your return is 31st July for non-audit cases and 31st October for audit cases.
Income Tax Slabs | Tax Rates |
Up to Rs. 3 lakh | NIL |
Rs. 3 lakh - Rs.7 lakh | 5% |
Rs. 7 lakh - Rs. 10 lakh | 10% |
Rs. 10 lakh - Rs. 12 lakh | 15% |
Rs. 12 lakh - Rs. 15 lakh | 20% |
Above Rs. 15 lakh | 30% |
Note:
The following are the features applicable only for new regime:
There were no changes made to the tax slabs under the old regime. The tax slabs under the old regime are as follows:
Income Slabs | Income Tax Rates |
Up to Rs. 2.5 lakh | NIL |
Rs. 2.5 lakh - Rs. 5 lakh | 5% |
Rs. 5 lakh - Rs. 10 lakh | 20% |
Above Rs. 10 lakh | 30% |
Income Slabs | Income Tax Rates |
Up to Rs. 3 lakh | NIL |
Rs. 3 lakh - Rs. 5 lakh | 5% |
Rs. 5 lakh - Rs. 10 lakh | 20% |
Above Rs. 10 lakh | 30% |
Income Slabs | Income Tax Rates |
Up to Rs. 5 lakh | NIL |
Rs. 5 lakh - Rs. 10 lakh | 20% |
Above Rs. 10 lakh | 30% |
Note:
The tax liability on your taxable income is for FY 2024- 25 is calculated as follows:
Income Slab | Tax Rate and Calculation |
Up to Rs. 3 lakh | Nil |
Rs. 3 lakh - Rs. 7 lakh | 5% on income above Rs. 3 lakh |
Rs. 7 lakh - Rs. 10 lakh | Rs. 20,000 + 10% on income above Rs. 7 lakh |
Rs. 10 lakh - Rs. 12 lakh | Rs. 50,000 + 15% on income above Rs. 10 lakh |
Rs. 12 lakh - Rs. 15 lakh | Rs. 80,000 + 20% on income above Rs. 12 lakh |
Above Rs. 15 lakh | Rs. 1,40,000 + 30% on income above Rs. 15 lakh |
Income Slabs | Tax Rate and Calculation |
Up to Rs. 2.5 lakh | NIL |
Rs. 2.5 lakh - Rs. 5 lakh | 5% on income above Rs. 2.5 lakh |
Rs. 5 lakh - Rs. 10 lakh | Rs.12,500 + 20% on income above Rs. 5 lakh |
Above Rs. 10 lakh | Rs.1,12,500 + 30% on income above Rs.10 lakh |
Income Slabs | Tax Rate and Calculation |
Up to Rs. 3 lakh | NIL |
Rs. 3 lakh - Rs. 5 lakh | 5% on income above Rs.3 lakh |
Rs. 5 lakh - Rs. 10 lakh | Rs.10,000 + 20% on income above Rs. 5 lakh |
Above Rs.10 lakh | Rs.1,10,000 + 30% on income above Rs.10 lakh |
Income Slabs | Tax Rate and Calculation |
Up to Rs. 5 lakh | NIL |
Rs. 5 lakh - Rs. 10 lakh | 20% on income above Rs.5 lakh |
Above Rs.10 lakh | Rs.1,00,000 + 30% on income above Rs.10 lakh |
Note:
You can also use Cleartax's Income tax calculator to find out your tax liability.
If income exceeds a certain threshold, additional taxes must be paid over and above existing tax rates. This is an additional tax on High-Income Earners.
Surcharge rates are as below:
Income Range | Surcharge Rate |
Exceeds Rs. 50 lakh but does not exceed Rs. 1 crore | 10% |
Exceeds Rs. 1 crore but does not exceed Rs. 2 crore | 15% |
Exceeds Rs. 2 crore but does not exceed Rs. 5 crore | 25% |
Exceeds Rs. 5 crore | 37% |
*The highest surcharge rate of 37% has been reduced to 25% under the new tax regime. (applicable from 1st April 2023)
Let us understand income tax slab rates under the old regime and the new regime using the following illustrations. The following examples also explain the tax slab rates of FY 2025-26 along with FY 2024-25:
Salary Income: 10 lakhs
Deductions available:
Particulars | New Regime | Old Regime |
Gross Salary | 10,00,000 | 10,00,000 |
Less: Deductions | ||
House Rent Allowance (HRA) | 1,60,000 | |
Leave Travel Allowance (LTA) | 30,000 | |
Children Education Allowance | 9,600 | |
Professional Tax | 2,400 | |
Standard Deductions | 75,000 | 50,000 |
Taxable Salary | 9,25,000 | 7,48,000 |
Less : Chapter VI-A deductions | ||
Medical Insurance Premium (Section 80D) | 50,000 | |
Education Loan (Section 80E) | 55,000 | |
Investment Deductions u/s 80C | 60,000 | |
Net Taxable Income | 9,25,000 | 5,83,000 |
Net Tax payable (Including Cess) | 44,200 | 30,264 |
In the above case, the old regime has resulted in lesser tax by Rs. 13,936. Though the new-regime has provided relaxed slab rates, old regime taxation is more beneficial in this case only because of many tax saving deductions. If the deductions were lesser, the new regime slab rates could have been more beneficial.
For the same net income under new regime, the taxes would be nil for FY 2025-26 since income up to Rs.12 lakhs would be practically zero taxable, owing to increased rebate and further relaxed slab rates.
Salary Income: 15 lakhs
Deductions available:
Tax calculation under both the regime for FY 2024-25:
Particulars | New Regime | Old Regime |
Gross Salary | 15,00,000 | 15,00,000 |
Less: Deductions | ||
House Rent Allowance (HRA) | 1,60,000 | |
Leave Travel Allowance (LTA) | 30,000 | |
Children Education Allowance | 9,600 | |
Professional Tax | 2,400 | |
Standard Deductions | 75,000 | 50,000 |
Taxable Salary | 14,25,000 | 12,48,000 |
Less : Chapter VI-A deductions | ||
Medical Insurance Premium (Section 80D) | 50,000 | |
Education Loan (Section 80E) | 55,000 | |
Investment Deductions u/s 80C | 60,000 | |
Net Taxable Income | 14,25,000 | 10,83,000 |
Net Tax payable (Including Cess) | 1,30,000 | 1,42,896 |
In the above case, the taxation under new regime is beneficial despite numerous tax saving deductions, which has primarily arisen because of relaxed slab rates. As, income increases, new regime slab rates would be more beneficial, unless we have more tax saving deductions exclusively available for taxation under old regime.
For the same income and deductions under slab rates applicable for FY 2025-26, the new regime would be still more beneficial, resulting in net tax payable of Rs.97,500, as compared to Rs.1,30,000 tax of previous financial year. This, is also primarily due to further relaxed slab rates.
Understanding the tax rates under both the old and new regimes is crucial for effective financial planning. While the new regime offers simplified and lower tax rates, especially for middle-income earners, the old regime may still be beneficial for those with significant tax-saving deductions. Being aware of these options allows you to make informed decisions and optimize your tax liability based on your income and financial situation.
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